Tuesday, 13 March 2012

India vs Southeast Asia - The Battle of the Asian Outsourcing Giants

The outsourcing industry as a whole has witnessed a sharp turnaround over the past 2 years. A detailed qualitative analysis of the steady growth of India in the Outsourcing industry has shown that India has actually been going from strength to strength as it looks to increase its market share by a massive 37% CAGR for the year 2012. The path is thus paved for the future; India is a definite giant in the Outsourcing Industry and it is here to stay. But a close look at the 2nd spot tells us that the battle is far from won. India's competition is close at its heels and it is a definite force to be reckoned with. This force is made up of a strong combination of the South East Asian countries; all of which are technologically very strong with wonderful infrastructure amenities.

Let us take the case of Philippines. Compared to India, this country has traditionally enjoyed significant dominance in the 'Voice' sector of the BPO Industry. Quite a lot of this dominance is because these countries, due to their close proximity to Japan, China and other technologically advanced countries- have fantastic IT infrastructure which is second to none. Another reason is because the youth of these countries follow English as their primary language; their vocabulary, their speech and their accent is preordained towards this industry. This helps the callers from a varied majority of English speaking countries to have an emotional connect with the person at the other end since they believe that they are actually speaking to a person of the same nationality. India on the other hand, while not employing English as the primary language prefers to stem and cultivate this language through its primary and secondary schooling. Indian vocabulary is free from slang and their accent is predominantly stemmed towards the British English. Since the Outsourcing boom started with a majority of US companies outsourcing their operations, it has taken some time to realise the difference between the potential of India and other South East Asian countries as an outsourcing hub. They both have their own strengths; but with the economic turnaround that is being seen in India as well as India's core competencies, it might just be a time for the US companies to hedge their bets.

Over to the 'Non-Voice' sector, India is significantly ahead compared to its closest competitor. Companies all over the world have explored options of outsourcing their 'Finance & Accounting' operations to the South East Asian countries, but these companies have been far from satisfied as regards to the quality of their operations as well as the cost savings involved. The secret behind India's unparalleled success in 'Finance & Accounting' operations has a lot to do with its culture and its history. Right from inventing the zero to the modern age, most companies look to hire Indian brains as their CFO. The inherent power and command of Indians over Finance and Accounting has been insurmountable as Indians have traditionally been recognised as being one of the most financially prudent people in the world.
As is synonymous between 'IT outsourcing' and 'India, the terms 'Financial Outsourcing' and 'India' have also been following each other in the recent years. Countries all over the world have come to appreciate the exacting standards laid down by the Institute of Chartered Accountants of India and the grilling exams a person has to pass to become a member of this Institute. Individuals who are members of this Institution have an amazing aptitude for numbers as well a concrete knowledge of Accountancy, IFRS, US GAAP, Indian Accounting Standards as well as the Auditing and Assurance Standards. A thorough detailed practical knowledge of these topics ensure that a person, who is a member of this Institution is indeed at the top of his game and is extremely knowledgeable in relation to the finer nuances of Finance and Accounting. It is these types of highly qualified people that the Indian Outsourcing Industry generally hires. The South East Asian Countries follow an educational level for Finance & Accounting professionals; which though quite good is not as stringent and thus companies outsourcing their Finance and Accounting to India will always get better quality of results at a cheaper cost. In the long run, it is this quality which gives India an edge.

In summary, the South East Asian Countries are doing really well for themselves; especially in the domain of the provision of 'Voice Services' to the US companies. However where the matter concerned relates to the provision of 'Voice Service' to their UK counterparts and the provision of 'Finance and Accounting' services to any global enterprise, India definitely has the edge

Please share your thoughts.


  1. I don't think that still it would be that easy to beat India. Southeast Asian countries are definitely good at English but India is improving too a lot in this term and the good thing is that it has more talented people than other counties, so chances are still in the favor of India.

  2. This is reality. Outsourcing in Asia is now rampant over the past 2 years. I really can't say that most work in India are good also in other countries in Asia but I believe there are always room for improvements.:)

  3. Thanks for your comments, everybody.  We are glad to hear from you and look forward to seeing more of you on our blog.